Downtown Vs. Neighborhoods

August 30, 1985

Another report is in from one of those task forces created by Mayor Washington to provide ideas for running the city. Last week, his committee on Navy Pier rhapsodized about transforming it into a cultural experience unsullied by a lot of shops and restaurants and other impurities that make money and jobs.

The recommendations were zany, but not particularly dangerous. At worst, they will cause further delays in developing Navy Pier`s potential as an attraction for families throughout the area.

The newest report is a lot more ominous. A mayoral advisory committee apparently was impressed with a recent study itemizing $10 billion in new development in the greater downtown area. Some people might rejoice in all that additional tax revenue pouring in to the city and look for ways to encourage more of it. But not this group. It figured out how to get even with the investors responsible for putting up those new commercial buildings: slap them with an extra tax.

Then, no doubt in an effort to be fair, it recommended another new tax for old commercial buildings.

``Our neighborhoods have suffered long enough while our tax dollars go to support downtown development,`` said one task force member. He must have stepped through Alice in Wonderland`s looking glass. The reverse is true. Downtown commercial development pays the highest effective property tax rate in the state. It`s the city`s leading subsidizer of neighborhood services and its biggest employer.

There`s nothing wrong with the goal of this group, the Advisory Committee on Linked Development. It wants more money for neighborhood improvements. One way to get it is to nurture sectors of the economy that have the best potential for growth and for generating tax revenue; right now, that`s commercial and residential development in the greater downtown area. The expansion into dilapidated territory south of Congress Street and west of Halsted Street is still in an early, fragile stage. It needs encouragement from City Hall, not a kick out to Schaumburg or Oak Brook.

Another way to channel more dollars into neighborhood services is to cut unproductive city spending. The task force is aiming for a neighborhood fund of about $27 million a year. That money can be raised by dropping 800 from the city`s work force of 41,500. Anyone familiar with Chicago government knows it can be done through attrition and a shift of people from do-nothing jobs

--extra layers of foremen and supervisors, for example--into productive work.

The task force may have been inspired by special fees on downtown office construction levied by San Francisco and Boston. The money is supposed to alleviate severe shortages of low and moderately priced housing. But San Francisco and Boston have robustly growing economies fueled by new industries; they can afford this experimentation far better than Chicago, which has suffered decades of loss in jobs and tax base.

There is a way, however, that downtown developers can help city neighborhoods. In the last two years Chicago-based financial institutions and foundations have contributed more than $200 million in grants and loan pools to improve neighborhood housing and commercial strips. Major downtown developers, particularly those who benefit from low-cost urban renewal land and other public subsidies, should give technical assistance to community groups to make sure that money is spent wisely.

Property tax breaks and other incentives are available for neighborhood commercial and industrial growth. The city should package and sell them aggressively and press the Cook County Board to extend them to residential development in rundown areas.

The mayor`s task force could have emphasized the positive and produced solid, creative recommendations for rebuilding Chicago neighborhoods. Instead, it re-ran an old, discredited tune: more taxes.